National Company Law Tribunal (NCLT) has turned out to be a big success story of 2018. Shouldered with the responsibility of rejigging bankrupt companies and helping lenders recover bad loans, the tribunal set up under section 408 of the Companies Act, 2013, and effective June 1, 2016, has successfully helped resolve several cases involving over Rs 80,000 crore. With several other big-ticket cases under its belt, the figure is likely to double in 2019. A couple of cases such as Essar Steel and Bhushan Power and Steel account for a whopping Rs 80,000 crore and Rs 45,000 crore, respectively.
The government should strengthen the hugely understaffed NCLT by increasing the number of judges and benches and other executives. The government and the Insolvency & Bankruptcy Board of India are reportedly planning to invoke certain sections against companies that have backed out on their plans. Apart from invoking section 74 of the Insolvency and Bankruptcy Code (IBC), which provides for a jail term, the government may also impose a maximum Rs 1 crore penalty on companies like Liberty House and Adani Wilmer which have withdrawn from their initial commitments to take over the stressed assets. A tribunal with more legal teeth can do wonders.